Tesla Motors, Inc. Investing 101 -- Demand Isn't an Issue

Tesla Motors (NASDAQ: TSLA) has guided for about a 50% boost in vehicle deliveries this year. For investors unfamiliar with Tesla's story, this number could sound a bit too optimistic. But as Fool contributor Daniel Sparks explains in the video below, not only is a 50% boost a conservative estimate, it's also the wrong area for Tesla investors to focus on. What will make or break Tesla is the company's long-term road map to ramp up supply.

Demand isn't a problem for Tesla. Not only does the company sell every vehicle it makes, but it hasn't spent any money on advertising. And, going forward, Tesla has no plans to initiate any paid advertising. Understanding this context is crucial for investors interested in the electric-car maker.

With more than enough demand amid Tesla's global rollout, investors should shift their focus from this year's delivery figures to Tesla's long-term plan to boost supply, Daniel says. Supply, he explains, is the ultimate story for Tesla investors to watch.

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Clueless. Demand is THE issue. Less than 18,000 of Tesla's 22,477 sales in 2013 were in North America. Tesla was late in delivering cars to Europe, starting slowing in the 3rd quarter. By the end of the 4th quarter, Tesla had effectively exhausted its backlog in Europe, except for the severely late right hand drive version. Registrations reported in 2014 in Europe were less than 300 in January and less than 600 in February (their has been a pop in Norweigan deliveries in the first 17 days of March.)

Guidance is to increase 2014 sales by ~56%, with a quarter of its sales in Europe or approximately 8,750--with nearly 17% of the year gone, they've only met 10% of their goal. There is a similar decline in NA. The great savior is China, where Tesla has decline to affliate with a local entity and there is no charging infrastructure.

The giggle factory is a head fake to raise capital for current operating expenses. TSLA's share price has successful "reckless growth" already priced in. Quarterly reports DO matter. If Tesla can't demonstrate consistent high levels of growth in geographic markets where it has been selling product, why would any one believe their projection of sales in the mid-six figures in a few years?